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REINSURANCE
 12 Months Ended
Dec. 31, 2013
REINSURANCE [Abstract]  
REINSURANCE
(5) REINSURANCE

We reinsure (cede) a portion of written premiums on an excess of loss or a quota-share basis to nonaffiliated insurance companies in order to limit our loss exposure. To the extent that reinsuring companies are unable to meet their obligations assumed under these reinsurance agreements, we remain primarily liable to our policyholders.

The impact of the reinsurance treaties on the financial statements is as follows.

 
 
Years Ended December 31,
 
 
 
2013
  
2012
  
2011
 
 
 
(Dollars in Thousands)
 
Premium written
 
  
  
 
Direct and Assumed
 
$
243,374
  
$
119,459
  
$
98,269
 
Ceded
  
(82,709
)
  
(51,085
)
  
(46,293
)
 
 
$
160,665
  
$
68,374
  
$
51,976
 
Premiums earned
            
Direct and Assumed
 
$
174,037
  
$
109,312
  
$
97,473
 
Ceded
  
(69,656
)
  
(49,953
)
  
(48,950
)
 
 
$
104,381
  
$
59,359
  
$
48,523
 
Losses and LAE incurred
            
Direct and Assumed
 
$
59,820
  
$
33,329
  
$
33,055
 
Ceded
  
(3,410
)
  
(3,120
)
  
(2,159
)
 
 
$
56,410
  
$
30,209
  
$
30,896
 
 
 
 
 
As of December 31,
 
 
 
2013
  
2012
 
 
 
(Dollars in Thousands)
 
Unpaid losses and LAE, net
 
  
 
Direct and Assumed
 
$
61,015
  
$
49,908
 
Ceded
  
(2,742
)
  
(3,503
)
 
        
 
 
$
58,273
  
$
46,405
 
 
        
Unearned premiums
        
Direct and Assumed
 
$
128,343
  
$
59,006
 
Ceded
  
(37,135
)
  
(24,083
)
 
        
 
 
$
91,208
  
$
34,923
 

The Company holds collateral under related reinsurance agreements in the form of fully funded trust agreements totaling $4.9 million that can be drawn on for amounts that remain unpaid for more than 120 days.